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High-low method: High-low method is a method of calculating the variable cost and the fixed cost of a product or service. The calculation of this method is based on the total production/activity cost and the lowest production/activity cost of the product during any period.
Variable Cost: Variable cost is a cost that changes when the volume of production changes, in the same direction and in the same proportion.
Fixed Cost: Fixed cost is a cost that remains constant irrespective of changes in the production volume.
Scattergraph: A scattergraph is a graph or a chart that represents the relationship between two variables for a given set of data.
Least-squares regression: The least-squares regression is a statistical tool to estimate the production costs. The least-squares regression uses an equation with the regression line to calculate the fixed and the variable costs.
- Using the high-low method, estimate a cost formula for manufacturing overhead.
- A scattergraph using two-year period data and describe the cost behavior pattern.
- The accuracy of high low estimates based on the least squares regression analysis estimated.
- For 22,500 machine-hours during a month, using the high-low method, estimate the total overhead cost by considering only the data points contained in the relevant range of activity.
- The accuracy of high low estimates based on least squares regression analysis estimated using only the data points given in the relevant range of activity.
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MANAGERIAL ACCOUNTING W/CONNECT
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